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HomeMy WebLinkAboutCOMM - Meeting Minutes - 276 - 12-5-2020 - RETIREMENT77 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR IIMITFD FlF,0799AI n Minute No. 276 December 5, 2019 The quarterly meeting of the Washington County Retirement Board was held at approximately 10:20 a.m. on Thursday, December 5, 2019, in the Public Meeting Room with the following members being present: Commissioners Larry Maggi, Harlan Shober, and Diana Vaughan, Controller Michael Namie, and Treasurer Francis L. King. Also present: Solicitor Lynn DeHaven, Chief Clerk Cindy Griffin, Director of Finance Joshua Hatfield, Secretary Paula Jansante, Barbara Miller representing the Observer -Reporter, and Lee Martin, Ph.D. and Sam Frymier representing Marquette Associates. Approval of Minutes Mr. Maggi entertained a motion to approve Minute No. 275 dated September 5, 2019. The motion was moved by Mrs. Vaughan and seconded by Mr. Namie that the above -mentioned minutes be approved as written. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Public Comment None. Treasurer's Report Mr. King stated that for August, September, and October 2019, the bank balance was reconciled to zero. It was moved by Mr. King and seconded by Mr. Namie that the report be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Retirement Allowance Report Bank Balance as of August 1, 2019 $ 88,188.22 Add: Transfers In 721,827.79 Add: ACH Credit 273,309.04 Less: Cancelled Checks (228,942.03) Less: ACH Debits (780,888.41) Bank Balance as of August 31, 2019 $ 73,494.61 Less: Outstanding Checks (47,263.79) Less: Retirement Check Run (26,230.82) Reconciled Balance as of August 31, 2019 $ 2 Bank Balance as of September 1, 2019 $ 73,494.61 Add: Transfers In 660,328.23 Add: ACH Credit 266,241.11 Less: Cancelled Checks (85,975.19) Less: ACH Debits (784,061.53) RETIREMENT BOARD IMR I IMITF:n F1rn7Q9Q1 n MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA Bank Balance as of September 30, 2019 Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of September 30, 2019 $ 130,027.23 (110,934.05) (19,093.18) $ Q Bank Balance as of October 1, 2019 $ 130,027.23 Add: Deposits to Checking Account 32,249.57 Add: Transfers In 448,877.78 Add: ACH Credit 230,371.65 Add: Other Credits 285,655.98 Less: Cancelled Checks (178,548.53) Less: ACH Debits (786,034.58) Bank Balance as of October 30, 2019 $ 162,599.10 Less: Outstanding Checks (138,042.21) Less: Retirement Check Run (24,556.89) Reconciled Balance as of October 30, 2019 $ Q Requisitions Mr. Namie stated that requisitions for the months of September, October, and November 2019 totaled $2,905,099.90. It was moved by Mr. Namie and seconded by Mrs. Vaughan that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King - yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Distributions September 2019 Check Payee Amount 1930 Diandra Fleming $ 7,868.56 1931 Joseph Fleming, Sr. 7,868.56 1932 Joseph Fleming, Jr. 7,868.56 1933 Justin Fleming 7,868.56 1934 Janet Weaver 38,051.74 1935 Pershing LLC as trustee of IRA of Mary Kay Bails 4,131.65 1936 VOID - 1937 Larry Clay 3,409.55 1938 Jamie Derkach 116.10 1939 Alicia Gordon 129.17 1940 Rebecca Salsbury 2,614.28 1941 Washington County Regular Payroll Escrow Account 20,757.94 1942 Washington County Cash Disbursement Account 18,296.16 1 79 RETIREMENT BOARD IMR I IMITFn FlR07Q9QI n MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA Transfer PNC Bank 66,583.13 Transfer Washington County Retirement Account 741,005.38 Total September 2019 Distributions $ 926.569.34 October 2019 Check Payee Amount 1944 Ronald M. Robinson $ 45,756.57 1945 Denise Jones 19,095.40 1946 VRIAC as trustee of IRA of George E. Miles I11 35,778.23 1947 Ashley Cairns 221.63 1948 Jeremy Cooper 67.08 1949 Gloria Damasus 1,707.73 1950 Michael Gaines 418.11 1951 Dwayne Hampson, Jr. 506.76 1952 Kieran Phoenix 294.16 1953 Sarah Reid 2,572.38 1954 Paul Shiring, Jr. 2,552.55 1955 Samantha Thomas 420.14 1956 Fidelity as trustee of IRA of Nicole Utchel 30,202.94 1957 Washington County Regular Payroll Escrow Account 20,644.10 1958 Washington County Cash Disbursement Account 27,179.05 1959 Shaylee Rigby 341.47 Transfer PNC Bank 66,324.34 Transfer Washington County Retirement Account 743,072.34 Total October 2019 Distributions $ 997.154.98 November 2019 Check Payee Amount 1960 Marcia L. Harvey $ 90.63 1961 Patrick Pushkarich 90.63 1962 Christine L. Weller 90.63 1963 John D. Woodward 139.47 1964 Carrie Betarie 925.83 1965 Martin Dorfman 1,132.67 1966 Aimee Gillispie 4,399.47 1967 Charlene Taylor 310.75 1968 Jennifer Shiel 49,371.10 1969 Alexis McCoy 1,189.46 1970 Washington County Regular Payroll Escrow Account 19,908.82 •' • MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR I IAAITFI F1Rn7Q9QI n 1971 Washington County Cash Disbursement Account 93,440.87 Transfer PNC Bank 62,521.75 Transfer Washington County Retirement Account 747,763.50 Total November 2019 Distributions $ 981.375.58 Old Business None. New Business Mr. Maggi noted for the record an agreement with Rebecca Ross to purchase prior service time credit for the period July 13, 1989 to January 15, 2003 in the amount of $27,461.95. Mr. Maggi entertained a motion for the approval of a request from Holly Dames to purchase unpaid leave of absence service credit for the periods April 7, 2004 to August 16, 2004, October 12, 2007 to January 7, 2008, and January 5, 2009 to June 15, 2009 in the amount of $3,794.89. Ms. Dames's request has been approved as required by the Board of Commissioners. The motion to approve was made by Mrs. Vaughan and seconded by Mr. Namie. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Mr. Maggi entertained a motion for the approval of a request from Patrick Puskarich to purchase per diem service credit for the period August 21, 1989 to February 7, 1993 in the amount of $3,713.52. The motion to approve was made by Mrs. Vaughan and seconded by Mr. Namie. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan - yes; Mr. Maggi — yes. Motion passed unanimously. Mr. Maggi entertained a motion for the approval of a request from Susan Wolf to purchase per diem service credit for the period November 6, 1989 to August 1, 1990 in the amount of $411.99. The motion to approve was made by Mrs. Vaughan and seconded by Mr. Shober. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Portfolio Presentation — Lee Martin, Ph.D. — Marauette Associates Mr. Martin began by presenting the results of Marquette Associates Database Report, noting that this year's report includes responses from 55 counties, the most ever in the 11 years the report has been compiled. Ten years ago, every county used a 7.5% assumed rate of return. In the last few years, more and more counties have been dialing back the assumed rate of return and de -risking their portfolios. • MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR LIMITFn F16079991 n Washington County is only one of two counties down to a 6.75% assumed rate of return, a fiscally responsible move. Looking at the salary increase assumption, Washington County is currently at 3.50%. Ideally, there should be 3% between the assumed rate of return and the salary increase assumption. Statistically, salary increases average about 4.5% over the lifetime of an employee. To keep the 3% spread between the two assumptions, the County may want to consider raising the salary increase assumption to 3.75% or 4.0%. Increasing the assumption will slightly impact the County's actuarially determined contribution, but will make the calculation more conservative. Public funds also now have a new mortality table. The good news is that public employees live longer than their corporate counterparts; the bad news is that the increased life span increases the liability and also impacts the actuarially determined contribution. Comparing the County's fund to other funds, Washington County is slightly more conservative, has a funded ratio above median, and is above median over 10 years for returns. Comparing fund participation, Washington County is below median with more retirees taking from the fund than current employees contributing to the fund. Taking the fund more conservative, which Washington County has done, helps hedge against having to continually sell assets to meet obligations. At this time, Commissioner Vaughan excused herself from the meeting due to a prior commitment. Turning the discussion to market environment, GDP continued its 2-year decline in the 3rd quarter of 2019. Manufacturing and new exports fell, also indicating slow growth. CEO confidence dropped although consumer confidence remained strong. CEO confidence is driven by factors such as GDP, trade data, and earnings data; consumer confidence is driven by consumers' perception of market performance. Equities were flat for the quarter with U.S. equities up 1.2% and international equities down 0.8%. When factoring in the 3% appreciation of the U.S. dollar however, international equities were up about 1 %. On the bond side, core bonds did much better than high -yield. REITs did very well since yields declined, commodities did poorly due to a big sell-off in energy, and agriculture suffered because of the trade wars. High quality defensive -type holdings outperformed for the quarter. The County's portfolio ended the 3rd quarter at $171 million and currently stands at $175 million to date in the 4th quarter, a return of 15.5%. What worked well were the high quality defensive -type equities; what didn't work as well were real assets and small -caps on the international side. Over 7 years, the fund increased $84 million, nearly half the fund amount in gains, with an average of $8.3 million per year. Negative outflows from the fund are at about $5 million a year, something that needs to be addressed. Mr. Martin suggested a new asset liability study, performed by Marquette Associates at no additional charge, to better predict future cash flows. This, in turn, will aid in better management of the pension fund. Detailing individual manager performance, Twin Capital, GW&K, Acadian, Parametric, and HNRG Timberland outperformed for the quarter. American Funds and Dodge & Cox were on benchmark, and J.P. Morgan underperformed. On the fixed income side, C.S. McKee outperformed and Federated Investors was on benchmark. The OPEB fund finished the 3rd quarter at $18.8 million and stands at $19.25 million to date in the 4th quarter, up 0.9%. What worked well were the high quality equities, global equities, and real estate. AN RETIREMENT BOARD IMR I IMITFII F=IA07Q9QI fl MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA For the 12 month period, the fund is about 100 basis points above the index, 4.4% vs. 3.4%. Since inception, the fund has returned an average of 7.7% per year and gained over $5 million. As this was Commissioner Shober's final Retirement Board meeting, he took the opportunity to thank Mr. Martin and Marquette Associates for the great job that they have done for Washington County Being Mr. King's final Retirement Board meeting also, he took the opportunity to address the Board stating that it has been an honor and a privilege to serve on the Retirement Board with his fellow members, both past and present. He also thanked Mr. Martin and Marquette Associates for their guidance and advice. By motion of Mr. King and second by Mr. Shober, the meeting was adjourned at 11:07 a.m. THE FOREGOING MINUTES SUBMITTED FOR APPROVAL: , 2020 ATTEST: 6v 1 E